Liquefied natural gas: Asian buyers are not buying. They expect better prices
Amid comfortable inventory levels for this time of year, Asian LNG buyers have remained on the sidelines of the spot market this week, hoping that the surge in natural gas prices following the Hamas attack on Israel will fade and prices become affordable again.
Natural gas prices in Asia and Europe rose this week, following suspected sabotage on an offshore pipeline in Europe and the threat of supplies from the eastern Mediterranean in case of further flare-ups in the Hamas-Israel war.
Asian buyers are not rushing to buy winter spot LNG supply this week at prices that have risen to eight-month highs, traders told Bloomberg.
Last week, spot LNG prices in Asia for November delivery slumped 10% week-on-week to $13.5 per million British thermal units (MMBtu) amid weak demand and warm weather, they said industry sources to Reuters.
This week, spot LNG cargoes were offered at elevated levels per MMBtu, according to traders interviewed by Bloomberg.
With inventories at comfortable levels, buyers in Asia await a possible reduction in tension in the Middle East.
The safety of gas deliveries in Europe has also been in focus this week, with suspected sabotage on the Finland-Estonia Balticconnector offshore gas pipeline.
“The damage to both the pipeline and the data cable is likely to be caused by external activities. What specifically caused the damage is not yet known,” Finnish President Sauli Niinisto said in a statement on Tuesday.
Additionally, global gas markets are concerned about supplies from the Eastern Mediterranean, which may be in danger following the Hamas attack on Israel and the possibility of further escalation of tensions in the Middle East and Eastern Mediterranean. The Tamar field was closed at the request of the Israelis and the large Leviathan field also had to divert its distribution
Futures for the month at the Dutch TTF hub, the benchmark for gas trading in Europe, rose 30% from Monday and were up 3% as of 712 GMT on Friday.
Prices increased not due to a real increase in demand, but due to the international situation. Until this is resolved, the market will remain extremely tense.
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The article Liquefied natural gas: Asian buyers are not buying. They expect better prices comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gas-naturale-liquefatto-i-compratori-asiatici-non-comprano-aspettano-prezzi-migliori/ on Sat, 14 Oct 2023 07:00:43 +0000.